An advice till the censorship of science by the directorate of the Centraal Planbureau is lifted

Archive

Tag Archives: economic supreme court

If you don’t have proportional representation (PR) then some voters get representatives they did not vote for. Thus it isn’t very democratic not to have PR.

The last weblog criticised the UK Electoral Reform Society (ERS) for erroneously claiming that Single Transferable Vote (STV) was PR.

ERS namely adopts districts, which causes STV to lose the limited PR properties that it has.

A persons affiliated with ERS answered to this criticism:

“We are well aware of the tension between the desire for (overall) proportionality and the desire for guaranteed local representation. This tension is apparent among British electors when opinion polls have asked relevant questions about the outcomes of voting systems. British electors want both overall proportionality (of parties) AND the local representation provided by exclusively single-member districts. That is just not possible, so we aim for a compromise between local representation and overall proportionality through appropriately-sized multi-member districts. (…).” (Personal communication)

This is an unsatisfactory answer since there simply is no such “compromise”. When one must choose between a square and a circle then the answer is not some other graphic with some measure of deviation. If there is no PR then there is no PR, and then ERS should not claim that they have PR. To express their “compromise”, ERS speaks about “STV-PR” but this is like speaking about square-circles, and comes with the grating sound from nails across a blackboard.

If n is the number of voters, s the number of seats, then q = n / s is the threshold or quota, of voters per member. A candidate can be elected when he or she meets the quota. When the district size is 2q, then the district representative must get 50%+1 of the vote to attain the quota. At best s / 2 seats can be filled in this manner, since s / 2 * 2q = n again. All unfilled seats can be allocated using overall PR. This shows that districts are not a key design feature, while PR is. (These formulas can be adjusted for turnout, when district size is defined in terms of the electorate and not actual voters. See here.)

By focusing on districts, ERS loses track of the key design feature, and it lets its logic be occluded by a less relevant issue.

Wikipedia follows ERS

Apparently the editors at wikipedia follow ERS rather uncritically. The wikipedia statement in red is what ERS claims falsely and what is adopted by wikipedia too. The statement in green is true. Since the statement in green is true, the statement in red can only be true by chance.

Proportional representation (PR) characterizes electoral systems by which divisions in an electorate are reflected proportionately in the elected body. If n% of the electorate support a particular political party, then roughly n% of seats will be won by that party. The essence of such systems is that all votes contribute to the result: not just a plurality, or a bare majority, of them. Proportional representation requires the use of multiple-member voting districts (also called super-districts); it is not possible using single-member districts alone.[1][2][3]In fact, the most proportional representation is achieved when just one super-district is used.

ERS thus is confusing the world including wikipedia. My advice for the editors of wikipedia (and the ERS) is:

Maintain conceptual integrity.

Restrict PR to the notion that p% of the votes translates into p% of the seats.

For PR the first preferences are relevant and not what is done with the subsequent preferences. Thus do not label STV as a PR-system but as “potentially PR”, or as STV-PPR.

For PR it suffices when the electorate selects parties. A single candidate is a party with a single candidate.

The professionals in parliament can use more complex systems like STV. The use of STV (there) must be compared to other systems, like Borda Fixed Point.

Get rid of the hangup on district representation.

Unfortunately, the person affiliated with ERS writes to me, with an unrelenting hangup about districts, and neglecting that PR should hold nation-wide:

“Neither the ERS nor I would be prepared to label STV-PT as “potentially PR” or anything similar. I have seen some academics describe STV-PR as “a semi-proportional” system. That is just nonsense. For the same district magnitude, STV-PR and party-list PR both deliver the same degree of proportionality. The fact that some electorates are prepared to accept electoral districts that cover the whole country for party-PR but don’t like the idea of “large” electoral districts for STV-PR is completely irrelevant. It is the district magnitude that is the determining factor, not the voting system.” (Personal communication)

Does this mean that Scotland comprehends democracy or that they don’t ?

The Party List System as used for the EU Parliament generates proportional representation (PR), and this would be the criterion for representative democracy.

(Obviously, for the election of a local council, the norm for PR are the local votes, and not nationwide PR. Once the issue here is reduced to apportionment, then STV is one of the options and a choice depends upon one’s criteria.)

Let us look at the Scottish implementation Additional Member System (AMS) a.k.a. Supplementary Member System a.k.a. Mixed Member System (MMS). I would prefer the latter term, since there is nothing “additional” about an elected MP. Sometimes the term “Mixed Member Proportional” (MMP) is used but this is only warranted when there really is overall PR.

The current Scottish system

Scotland has 73 constituencies, in which the candidate is selected by FPTP. There are 8 regions with 7 seats per region, to a total of 56 regional seats. These “additional seats” are used to make the outcome more proportional. Brief explanations of the current Scottish system are by the Parliament itself and The Scotsman. The Scottish Parliament elections of May 5 2016 have these full data. The turnout was 55.6%.

Scotland like the UK has a hangup on the distinction between the local candidate and the party. It is claimed: “In the second vote the voter votes for a party rather than a candidate.” Indeed, when the first vote has a FPTP selection, then voters may be forced to vote strategically for a candidate of reduced preference, in trying to prevent that a worst candidate is selected. Thus the explanation about local representation may be a misrepresentation about what might really motivate voters.

When we compare the votes for the constituencies (districts) and the regions, then we don’t see much of a difference, except for the Greens and Others. (This are totals though, and there might be differences over districts.)

District

Region

Party

Votes

Votes

Con

501,844

524,222

Green

13,172

150,426

Lab

514,261

435,919

LD

178,238

119,284

SNP

1,059,898

953,587

Others

11,741

102,314

Total

2,279,154

2,285,752

We take the summed region vote as determining what the proportions for the parties should be. The additional 56 seats and their restriction to regions are not enough for correction of the error in the local vote. The SNP got 7% more seats than warranted under PR.

District

Region

All

Party

Seats

Seats

Seats

%Seats

%Votes

%S-%V

Con

7

24

31

24.0

22.9

1.1

Green

0

6

6

4.7

6.6

-1.9

Lab

3

21

24

18.6

19.1

-0.5

LD

4

1

5

3.9

5.2

-1.3

SNP

59

4

63

48.8

41.7

7.1

Others

0

0

0

0.0

4.5

-4.5

Total

73

56

129

100.0

100.0

An alternative for Scotland

Let us consider a rough alternative for Scotland:

A local winner must get at least 50% of the vote of a district (constituency).

All 129 seats are allocated in proportion to the summed region vote.

The data file allows us to determine which candidates are elected now. This generates a quite different result. In the local vote, only 29 candidates manage to get at least 50% of their district (constituency). 95 candidates are selected via the Party List, which puts the ERS argument for locality into perspective. In this rough alternative, there are 5 seats that cannot be allocated due to rounding errors. But having 4% empty seats is not unfair given that 4.5% of the votes are wasted on the small parties.

District

Region

All

Party

Seats

Seats

Seats

%Seats

%Votes

%S-%V

Con

1

29

30

23.3

22.9

0.3

Green

0

8

8

6.2

6.6

-0.4

Lab

0

25

25

19.4

19.1

0.3

LD

2

5

7

5.4

5.2

0.2

SNP

26

28

54

41.9

41.7

0.1

Others

0

0

0

0.0

4.5

-4.5

Total

29

95

124

96.1

100.0

A general observation

The quota is q = 2,285,752 / 129 = 17720. Above criterion of 50% of the local vote might be too lax. With 73 districts, the number or electors per district might be too small. If the number of districts is 129 / 2 ≈ 65, then the average district has size 2q, and the criterion of at least 50% of the votes would fit the overall condition of winning a seat via satisfying q.

A google showed this page by Andrew Ducker who also wondered about PR in Scotland. He mentions: (1) The region votes must be summed for nationwide PR indeed. (2) A 50%:50% distinction between local and national seats would be helpful indeed. In reply to this: why still allow FPTP when it may cause that a minority winner would become the “representative” ? It is better to require at least q and/or at least 50% of the district.

The UK Electoral Reform Society (ERS)

The UK ERS falsely claims that STV applied to districts would be PR while it is not. The ERS also criticises the Scottish system, but perhaps for the wrong reasons.

In 2011, the current Scottish system was already in place, and the ERS advised a change. See the Guardian or the BCC:

One of the authors of the report, Prof John Curtice of Strathclyde University, said: “The widespread expectation that the Scottish Parliament would be a multi-party parliament, in which no party would ever have an overall majority, has been dashed. “In truth, although the electoral system bequeathed to the Scottish Parliament by Labour was far more proportional than first-past-the-post, it was never one that was best fitted to the realisation of that original expectation. “It still favours larger parties over smaller ones, who, indeed, are actually being discouraged from standing in the constituency contests.” (BBC 2011-11-15)

A similar critique is given w.r.t. the 2016 outcome. Some changes like an “open party” list (i.e. the ability to vote for individual party candidates on the list) and the allocation of Sainte-Laguë may indeed be mentioned.

But this is small beer compared to the major critique on the Scottish system, that it still allows for the hangup on district representation.

While the ERS should warn voters and legislators about this hangup, the ERS suffers from this hangup itself too, and propounds STV for districts, which destroys PR.

The person affiliated with ERS writes to me:

I am not in favour of electing MPs (or other representatives) in two different ways. In Scotland we have experience of the Scottish Parliament where MSPs are elected by the Additional Member System (AMS = a regionalised version of MMP). Some of the worst problems of electing MSPs in two different ways (Constituency and Region) have abated over the years, but the tension remains and surfaces from time to time. It would have been much better if all the MSPs had been elected by STV-PR, but AMS was a political compromise as one the major parties (Labour) would just not accept STV-PR at any price. (Personal communication)

Again, this person at ERS suggests that STV would be PR, even calling it STV-PR, while the very application of STV to districts destroys the PR.

“If the working people wanted democracy, why do so many now not vote? Surely these are the people that should be most eager to flex their democratic muscle? In research for my book, Missing Scotland, I tried to find out why more than a million Scots choose not to vote. What I found is worrying. Most important of all, people don’t think voting will make anything better. They have tried voting, and they have tried not voting, and there is no difference. They think politicians are all the same, don’t understand their lives and they make promises they never keep. This is not a question of not caring. The people I spoke to care a lot about their families and communities. They are worried about losing their homes or their jobs. They even like the idea of democracy, they just don’t think we have it. Not voting is often a deliberate act.”

I haven’t read this book, but only find it relevant enough to mention its existence. My guess is that Sullivan hasn’t mentioned two elements:

When the Scottish electoral system was changed, they didn’t adopt the PR system like in Holland, but kept their hangup on districts, and ERS itself was an agent in this. Potentially Sullivan might feel ashamed that he doesn’t quite comprehend what democracy is.

Conclusion

My finding is that major political distortions in the UK, France, USA and India arise because of lack of PR. A lobby for STV for districts doesn’t resolve this, and it is falsely claimed to be PR. Thus I would tend to advice electoral reform in this order of priority:

first PR, like the system in Holland or the EU Parliament (Open Party List)

if this is up and running, secondly allow for an element of locality for half of the seats (s / 2, district size 2q, and the district representative is elected with at least 50% of the district vote, potentially corrected for turnout)

if this is up and running, improve the system by allowing voters freedom on how they vote

compare STV and Borda Fixed Point and other methods for the selection of the local representative.

The UK Electoral Reform Society hinders clarity on electoral reform since they show a hangup on districts. They better focus on establishing Proportional Representation (PR), while regarding the issue of districts as of secondary importance.

Given overall PR, one might even let voters determine on the ballot how to deal with the district representation, for the s / 2 seats available for district representation.

Some voters might vote for a party, and be done with that. Seats are allocated to the party in proportion to the total number of votes. (Closed Party List) Some voters might wish to select a party but also a particular person in that party, so that the party order takes over if the person would not be elected. (Open Party List) These approaches can be combined (as in Holland) when the Closed List voters vote for the party leader.

Some voters might indicate where their vote would go, if their party of choice isn’t elected. (Remember that a single candidate is a party with a single candidate.)

Other voters might wish to vote for particular candidates across parties, and then might want to indicate how votes would have to be transferred if the candidate doesn’t get elected. (Otherwise it is apportioned automatically.) There is still the comparison between STV and e.g. (repeated) application of the Borda Fixed Point method. STV runs the risk of eliminating a compromis candidate, who receives few votes in the initial stage, but who can collect support because of secondary preferences. This might not be relevant for the party proportion but be quite relevant for voters and the candidates themselves. This would not be an issue of PR but of Quality Representation (QR).

PS. Dan Hodges (Telegraph June 1 2015) has a very entertaining article “No, Britain does not want proportional representation“. The weak spot in his argument is that the 2011 referendum on AV was misrepresented as a referendum on PR while it actually was a referendum on AV. The strong point is that ERS cannot be convincing if its arguments are confused. There still is a case for sound arguments and good education.

PPS. The subtle relation between proportional representation (PR) and district representation (DR) shows also in the existence of a Senate or House of Lords, in which districts / States might be represented by 2 senators per State like in the USA. For a Senate the DR might be acceptable since the Senate has the role of guardian for the nation itself. The House would be sensitive to the preferences of the electorate, and in that case PR would be logical.

Five years ago I discussed the “Dutch Taliban“. I can now include Dutch “pluralist economics” to this narrative.

There is this particular course “Economics from a pluralist perspective” in English though created by two Dutch professors Irene van Staveren (ISS) and Rob van Tulder (RSM) and a PhD student. I have no access to this course so I cannot check whether they refer to my analysis in DRGTPE and CSBH or not. I presume that I would have been informed if they had. The following is conditional on the probable assumption of neglect.

I will refer to some books that I haven’t read, and explain why I will not read them. One book by Van Staveren that I haven’t read deals with economists who aren’t read. I understand that she doesn’t include me as an economist who isn’t read.

I already wrote about “Economics as a zoo” in 2005, and pointed to the terms of orthodoxy and heterodoxy as inadequate. Much is plain old history of economic thought. Apparently the new term is “pluralism”. Also, I was one of the economists who warned before the 2007+ crisis, yet Dutch economists neglect my work and neglect my protest against censorship, and apparently I am in some other dimension than their “pluralism”.

I regard myself as a neoclassical economist, in the term as coined by Paul Samuelson. I am eclectic and open to ideas but for practical work there must be a model, using theory and tested by statistics. My work is not mainstream yet because my work has been hit by censorship. My work rejects neoliberal economics (Robert Lucas), but anyone can check that neoliberal economics is emperically untenable. Readers should not confuse neoclassical economics with neoliberal economics.

My impression is that “pluralist” economists might so much fear mainstream economics and also so much desire to be accepted, that they opt for versions of “pluralism” that are not really dangerous to mainstream economics. Which means that their “pluralism” is useless. But they can applaud each other greatly in their mutual admiration bubble.

Pluralist economics, before or after the crisis ?

The two professors cause the tantalising question whether pluralism starts before or after the 2007+ crisis.

The online course refers to Irene van Staveren’s matricola textbook Economics After the Crisis. An Introduction to Economics from a Pluralist and Global Perspective. ($61.53) (Dutch: Managementboek).

The online course manual states clearly that this textbook is not necessary for the course itself. This is fine, since the book is rather expensive, and one would wish for open access books nowadays. (See here for a cheap solution for open access publishing.) They state that the book will be helpful if you want to read from paper. The professors apparently thus think that the economic crisis hasn’t been a natural experiment that explains which approach was empirically most relevant, but only provides a case for more pluralism, perhaps to allow for more natural experiments by economists who don’t know what to think because they have so many theories to choose from.

Pluralism as Orwellian newspeak

Dutch pluralist economics is Orwellian newspeak for anything fashionable, as long as it neglects the censorship of science since 1990 by the directorate of the Dutch Central Planning Bureau (CPB). Dutch pluralist economics has these fundamental tenets:

Economics is an empirical science, and the censorship at CPB doesn’t exist so it cannot be observed. Any fact on this can be neglected. (If I worked there and there aren’t CPB publications to my name, then this must have another explanation than censorship.)

Scientists will protest against censorship, and since scientists don’t protest then apparently there is no censorship. Hail to free society and the wisdom of Dutch government and Dutch economists. Except criticism for pluralism, of course.

Errors by the directorate of the CPB might be made, but not on censorship and dismissals with untruths. If the Dutch legal system allows such censorship and untruths because judges assume that the Dutch government wouldn’t do such things, then this only proves that there is no censorship.

The censorship has no consequences for policy making either, since something that doesn’t exist clearly can have no consequences.

It is only possible to know what the censorship is about once it has been lifted, but since it doesn’t exist it must be about nothing.

The economic crisis of 2007+ confirms my analysis of 1990, yet for Dutch economists there is the special task to completely neglect his work and his protest against censorship, since Thomas and his work do not exist, as proven in the above.

Well, Thomas might exist as a lunatic, see his protest against this censorship by the directorate of CPB. Completely irresponsible about such a respected institute (even though the directorate goofed on the crisis and its treatment and the policy of wage moderation).

What might seem tolerant or pluralist appears to be another form of fundamentalism. Professors Irene van Staveren (ISS) and Rob van Tulder (RSM) show engaging smiles that however hide mental niqabs or beards. (There is no need to overdo the metaphor with Photoshop.)

Van Staveren is anabaptist and her answer to neighbourly love is that she selects which neighbour to love. Van Tulder has a book for students about the essential skills for studying. Indeed, in our knowledge society, studying is actually a job too, and I am in favour of a student wage. Van Tulder’s book has the advice: “Dare to build upon research from others” – and apparently he has found other others than me who he really dares to build upon for his version of pluralism.

Smiles that hide fundamentalism. (Source: RSM and wikimedia)

Amartya Sen, voting theory and the Brexit referendum question

Irene van Staveren states that she derives much inspiration from the work of Amartya Sen. Sen however is a very mainstream economist and is seriously misguided on some key issues, so that one wonders what Van Staveren finds so inspiring. Sen is famous and fashionable, true, but fame and fashion are not scientific criteria.

One of my papers that got hit by the censorship deconstructs Kenneth Arrow’s impossibility theorem. (CPB internal memo 90-III-37, but better start now with my book Voting Theory for Democracy (VTFD).) Sen in his Collective Choice and Social Welfare gives a useful standard presentation of Arrow’s theorem. One can check that Sen doesn’t understand it. (Dutch readers can look here.) With Arrow, Sen actually helps to destroy democracy.

One can check that Sen’s own theorem on the supposed impossibility of a Paretian liberal is misguided as well, see VTFD.

Sen’s book Development as freedom is a collection of platitudes and open doors, comparable to “don’t give money but a fishing rod”.

Sen’s argument that democracies have less famines than non-democracies is questionable, see India itself. It is a better argument that the Trias Politica model of democracy fails, also in the case of hunger, whence each democracy requires an Economic Supreme Court.

While Sen has a training as an economist and mathematician, all this suggests that he is more inclided to abstract thought as a mathematician and less as an empiricist. It is not clear to me what Van Staveren’s background w.r.t. mathematics is.

It are such uncritical professors like Irene van Staveren who cause that Sen has gotten such authority in some circles. This is not without consequences. Sen’s misconception on voting theory shows also in his article with Eric Maskin in the NY Review of Books on electoral reform in the USA. The key advice that voting theorists can give to democracies is to switch to proportional representation (PR) in the House of Commons of parliament, and the selection of the executive power (ministers including PM) by such a PR House of Commons. Instead, Maskin and Sen stick to direct election of the US President, which however is subject to many voting paradoxes as has been illuminated by Arrow’s theorem. They adopt the best way to destroy democracy, namely by using methods that are unconvincing for the general population. There are various techniques of voting, but these better be used by parliament itself, once parliament has been chosen by PR. (Compare Holland with the UK.) Thus, Maskin and Sen, in their lack of understanding of voting theory, keep the US caught in suboptimality and cynicism. If there are no good alternatives, then Trump perhaps really was the democratically best choice. Similarly for the UK and India indeed. And Van Staveren cheers on, finding inspiration in Sen, and neglecting the censorship of science by the directorate of the CPB w.r.t. my work that contains the scientifically correct analysis.

Another example is Brexit. Undoubtedly many UK policy advisors have been trained either directly or via their teachers on Sen’s Collective Choice and Social Welfare as well. See my article in the RES Newsletter, April 2017, and reproduced on the LSE Brexit blog.

Environmental sustainability

A bit more can be said about sustainability, apart from Sen. Rob van Tulder has a major teaching engagement on management of sustainability in businesses. If prices aren’t right, then companies might make amends themselves. It seems that he neglects Tinbergen and Hueting’s on environmental sustainability. It would be much more effective to argue that environmental costs are included in the prices, since companies should not do what only the government can do properly.

“Professor van Tulder is co-founder of RSM’s Department of Business-Society Management, a world-leading department on the issues surrounding sustainability. The department offers a highly successful master’s specialising in sustainability.”

Also, Irene van Staveren and Jan Peil have edited this Handbook of Economics and Ethics. (2009), £168.30 in a period where open access already was a known concept.

Hans Opschoor there explains the topic of sustainability. I don’t have the text and would be interested to see what he states about Hueting’s work, since there are remarkable confusions about it. Opschoor coined the term “milieugebruiksruimte” (environmental carrying capacity) in 1989, but this is only an application of Hueting’s notion of environmental functions of 1974, after which Opschoor got citations that should have gone to Hueting. In this short text of 2016 Opschoor only refers to Hueting”s 1974 thesis but not to his later notion of environmentally sustainable national income (eSNI).

My own analysis on Arrow’s impossibility theorem might be included too, since Arrow claims moral desirability for the demolition of democracy, while I use deontic logic to show that this is unwarranted, see VTFD chapter 9.2 on page 239. (And perhaps read “Deontology” by Mark D. White.) Yet, why would my analysis be included in this book behind a paywall, as VTFD is already online ? Hopefully some of the authors refer properly.

There is a chapter on Sen by Sabina Alkire, and hopefully she was aware of the above.

There is a chapter on poverty by Andy Sumner and on minimum wages by Ellen Mutari, and I can only hope that they have been aware of the following below.

Unemployment and poverty

In 1998 I gave Van Tulder a copy of this Dutch book on unemployment and poverty. He would read it and get back to me. This didn’t happen. Perhaps Van Tulder did not like the book ? We can only guess. This is a nice review in Dutch at DISK (lay people) and this is a misguided and misleading review by a Dutch economist, Joan Muysken, which case I already discussed on CofFEE or latte. If Van Tulder had misgivings in 1998 he could have discussed those with me. My impression is that Van Staveren can be annoyed towards Van Tulder that his silence on this may have caused her the lost years of 1998-2017 of looking for a good analysis, and the rest of the world the actual crisis of 2007+.

The book is a text for the general public, and fellow economists can find the same analysis in DRGTPE. However, journalists Hans Hulst and Auke Hulst report also on some events w.r.t. CPB which isn’t in DRGTPE.

Van Staveren’s co-editor Jan Peil, from above book on economics and ethics, also collaborated on a Dutch book on poverty and social exclusion. Translation: “Almost a million people in Holland have to deal with poverty.” This is a review at DISK in Dutch of 2007. DISK has been abolished now. Above book W&A had been reviewed also by DISK, but the review might no longer be at their site. My impression is that various channels of information have not been used.

Economists who (almost) aren’t read anymore

Van Staveren also wrote a book (EUR 22.50) for the general public, in Dutch, about economists “who (almost) aren’t read anymore”. (The brackets are logically strange.) There exists already a Dutch translation of Heilbroner’s masterpiece, but Van Staveren wants to link up to the 2007+ crisis.

The book’s cover has a problematic claim. Let me use Google Translate for the fun of it, and it actually does a remarkable good job. The first sentence is that neoclassical economics seemed to be the only relevant theory.

It is incorrect to say that other thoughts were generally dismissed. Perhaps there were instances, but not over the board. Good economists have kept an interest in the history of economic theory. But not everything can be used at the relevant job at hand. When there has been bad policy, a main factor has been the failure of the Trias Politica model of democracy, with too much room for politicians to manipulate information. See my advice for an Economic Supreme Court.

Why doesn’t Van Staveren mention my work as largely unread ? For an answer, she only allows the categories that I would be naive or stupid. This doesn’t strike me as logically and empirically sound. Her book must be the product of a severely deluded bubble.

I wonder whether I should show Van Tulder’s “Dare to build upon research from others” to give some indications about these authors. I can spend only a line on each, and this might strike the reader as dismissive and disrepectful, while the fellow economist might have worked hard most of his or her life to contribute to economic science. I wouldn’t want that my own work would be dismissed disrespectfully either. Yet, Van Staveren’s selection strikes me as rather curious:

Of these fellow economists, I had never heard of Barbara Bergmann before. Apparently she looked at gender in economics, and this hasn’t been my topic of interest. I suppose however that she is well read by economists who deem gender an important aspect. (E.g. on risk taking.)

Karl Marx is only interesting for history, in the same way as one would read Julius Caesar.

Perhaps Gunnar Myrdal isn’t much read nowadays, but that requires a longer explanation, including the lifting of the censorship at CPB.

Hyman Minsky of course is the celebrated case, but the description about his lack of influence is more complicated than mere dismissal. He really was a professor of economics, and I am not. I wonder whether there weren’t more standard neoclassical authors who said much of the same, so that Minsky’s main advantage is that he now is the best known “neglected” one. The main point is not neglect, but the failure of the Trias Politica model of democracy.

Keynes would not be read ? Well, one might say that many neoliberals didn’t read much of Keynes before 2007, but Ben Bernanke was chairman of the US Fed in 2006-2014, and we can be assured that Bernanke read Keynes, and that he responded admirably to the crisis, for otherwise the world had imploded. Let me also mention the biography by Skidelsky, that generated a renewed interest in Keynes, starting in 1983.

Frank Knight gave wrong definitions of uncertainty and risk, see DRGTPE. What was relevant however got reworked by Keynes. The 2007+ crisis caused a renewed interest in the Chicago Plan, indeed. See the comment on Minsky.

Thorstein Veblen wasn’t read ? I cannot believe this.

Amartya Sen has been amply read, see above discussion. Van Staveren wants to portray him as unread only to promote her bubble.

Adam Smith unread ? I cannot believe this. Contrary to Marx, he is still quite relevant, see Heilbroner.

Joan Robinson ? Apparently her contribution on “imperfect competition” has been included in neoclassical economics. In heterodoxy, her writings have some popularity, but it is not clear to me why she should be read more widely. Her work never seemed to matter for my own work and I haven’t really read her. Perhaps she is relevant for other fields of economics, but I would not know.

Above indication isn’t intended to mark these authors in a particular manner. The only intention is to argue that Van Staveren’s selection is rather curious. Most likely the title of her book is plain wrong. The present title might be much of a marketing ploy. A neutral title might have been: Views from the history of economics on the economic crisis.

It matters a great deal how the issue is presented (framed):

My analysis is that economics already contained ample information, so that the crisis has been caused by failure of the Trias Politica by abuse by policy makers. For example, policy makers could and can cherry pick an economist to defend a particular policy. My advice is an Economic Supreme Court, so that such cherry picking is no longer possible, for the ESC will weigh arguments on content.

Irene van Staveren puts the blame of the crisis on the economics profession itself, also at the academia, instead of the policy makers. She wants the whole of the economics profession to function as an Economic Supreme Court. This is a category mistake, since the academia do not have the task to support policy making but to generate new insights and criticism.

Misleading the public

In her bubble, Van Staveren neglects my work, doesn’t mind about the censorship, and misleads the public.

A lay person’s review shows that Van Staveren partly did a good job in reaching out to the public.

“A few jumping points from the book: Not only did many scientists see the 2007 financial crisis, the same people predict that the weather will go wrong. According to them, nothing has changed, such as the strict separation of savings banks and business banks and insurance. Taxpayers have to pay billions to save banks that were too big to fail, the banks are still too big to fail and still sell incomprehensible and uncontrollable products, so soon we have to dock again. If we all agree to vote On politicians who send themselves through the bank lobby because we just do not understand well, we have to pay for our intellectual laziness.” (Google translate from: “Een paar springende punten uit het boek: niet alleen zagen veel wetenschappers de financiële crisis van 2007 aankomen, dezelfde mensen voorspellen dat het weer mis zal gaan. Er is volgens hen niks wezenlijks veranderd, zoals het strikt scheiden van spaarbanken en zakenbanken en verzekeringen. Belastingbetalers hebben miljarden moeten betalen om banken die too big to fail waren te redden, de banken zijn nog steeds too big to fail en verkopen nog steeds onbegrijpelijke en oncontroleerbare producten, dus binnenkort moeten we weer dokken. Als we met z’n allen blijven stemmen op politici die zich door de bankenlobby laten sturen, omdat we het gewoon niet goed begrijpen, zullen we dus voor onze intellectuele luiheid moeten boeten.”)

However, this message could also have been given without this particular book.

This lay person shows a confusion between neoclassical economics and neoliberal economics. Perhaps Van Staveren has this too ? Also, this lay reviewer states to have gotten an interest in Amartya Sen because of Van Staveren’s praise. Ouch.

More points tomorrow

Hans Rosling (1948-2017) was a professor of public health and at the Swedish Academy of Sciences. I hadn’t heard about him but his death caused newsmedia to report about his mission to better inform people by the innovative presentation of statistics. I looked at some of his presentations, and found them both informative and innovative indeed.

I applaud this chart in which he tabulates not only causes and effects but rather means and goals. (Clicking on the picture will bring you to the TED talk 2007, and at the end the audience may applaud for another reason, namely when he swallows a sword to illustrate that the “impossible is possible”.)

Hans Rosling 1948-2017

Continue the discussion

My impression is that we best honour Rosling by continuing the discussion about his work. Thus, my comments are as follows.

First of all, my book Definition & Reality in the General Theory of Political Economy shows that the Trias Politica model of democracy fails, because it allows politicians still too much room to manipulate information and to meddle in scientific advice on policy making. Thus, governance is much more important than Rosling suggested. Because of his analysis, Rosling in some of his simulations only used economic growth as the decisive causal factor to explain the development of countries. However, the key causal factor is governance. The statistical reporting on this is not well developed yet. Thus, I move one + from economic growth to governance.

Secondly, my draft book The Tinbergen & Hueting Approach in the Economics of Ecological Survival discusses that the environment has become a dominant risk for the world as we know it. It is not a mathematical certainty that there will be ecological collapse, but the very nature of ecological collapse is that it comes suddenly, when you don’t expect it. The ecology is so complex and we simply don’t have enough information to manage it properly. It is like standing at the edge of a ravine. With superb control you might risk to edge one millimeter closer, but if you are not certain that the ground will hold and that there will not be a sudden rush of wind, then you better back up. The table given by Rosling doesn’t reflect this key point. Thus, I move one + from economic growth to the environment.

In sum, we get the following adapted table.

Adapted from Hans Rosling

I have contemplated for the means whether I would want to shift another + from economic growth to either human rights (property rights) or education (I am also a teacher). However, my current objective is to highlight the main analytical difference only.

In the continued discussion we should take care of proper definitions.

What does “economic growth” mean ?

The term “economic growth” is confusing. There is a distinction between level and annual growth of income, and there is a distinction w.r.t. categories within. Economic welfare consists of both material products (production and services) and immaterial elements (conditions and services). If the term “economic growth” includes both then this would be okay. In that case, however, the whole table would already be included in the notion of welfare and economic growth. Apparently, Hans Rosling intended the term “economic growth” for the material products. I would suggest to replace his “economic growth” by “income level”, and thus focus on both income and level rather than annual change of a confusingly named statistic. Obviously, it is a policy target that all people would have a decent standard of living, but it is useful to remain aware that income is only a means to a higher purpose, namely to live a good life.

PM. This causes a discussion about the income distribution, and how the poor and the rich refer to each other, so that the notion of poverty is relative to the general standard of society. In the 1980s the computer was a luxury item and nowadays a cell-phone with larger capacity is a necessity. These are relevant aspects but a discussion would lead too far here now.

What does “environment” mean ?

In the adapted table, the environment gets ++ as both means and goal. There is slight change of meaning for these separate angles.

The environment as a goal means that we want to preserve nature for our descendants. Our kids and grandchildren should also have tigers and whales in their natural habitat, and not as photographs only.

The environment as means causes some flip-flop thinking.
(1) In economic thought, everything that exists either already existed or mankind has crafted it from what was given. Thus we only have (i) the environment, (ii) human labour. There are no other means available. From this perspective the environment deserves +++.
(2) For most of its existence (some 60,000 years), mankind took the environment for granted. Clear air and water where available, and if some got polluted it was easy to move to a next clean spot. The economic price of the environment was zero. (Or close to it: the cost of moving was not quite a burden or seen as an economic cost.) Thus, as a means, the environment didn’t figure, and from this viewpoint it deserves a 0. There are still many people who think in this manner. It might be an engrained cultural habit, but a rather dangerous one.
(3) Perhaps around the middle of the past century, the 1950s, the environment has become scarce. As Lionel Robbins explained: the environment has become an economic good. The environment provides functions for human existence and survival, and those functions now get a price. Even more, the Tinbergen & Hueting approach acknowledges that the ecology has become risky for human survival. The USA and Europe might think that they can outsource most environmental pollution to the poorer regions of the world, but when the rain forests turn into deserts and when the CO2 turns the oceans into an acid soup that eats away the bones of fish, then the USA and Europe will suffer the consequences too. In that perspective, the environment deserves +++.
(4) How can we make sure that the environment gets proper place in the framework of all issues ? Eventually, nature is stronger than mankind, and there might arise some natural correction. However, there is also governance. If we get our stuff together, then mankind might manage the world economy, save the environment at some cost, but still achieve the other goals. Thus governance is +++ and the environment is relative at ++. Thus we arrive at above adapted table.

Dynamic simulation

As a teacher of mathematics I emphasize the combined presentation of text, formula, numeric table, and graph. By looking at these different angles, there is greater scope for integrated understanding. Some students are better at single aspects, but by presenting the four angles you cover the various types of students, and all students get an opportunity to develop the aspects that they are weaker in.

Obviously, dynamic simulation is a fifth aspect. See for example the Wolfram Demonstrations project. Many have been making applets in Java and embedding this in html5, yet the use of Mathematica would allow for more exchangeable and editable code and embedding within educational contexts in which the manipulation of text, formula, numeric table, and graph would also be standard.

Obviously, role playing and simulation games are a sixth aspect. This adds human interaction and social psychology to the learning experience. Dennis Meadows has been using this to allow people to grow aware of the risk on the environment, see e.g. “Stratagem” or MIT-Sloan.

The economic crisis of 2007+

What I particularly like about Rosling’s table is his emphasis on culture as a goal. Artists and other people in the world of culture will already be convinced of this – see also Roefie Hueting on the jazz stage – yet others may not be aware that mankind exists by culture.

There is also an important economic angle on culture as a means. In recessions and depressions, the government can stimulate cultural activity, such that money starts flowing again with much less risk for competitive conditions. That is, if the government would support the automobile industry or steel and do specific investments, then this might favour some industries or services at the cost of others, and it might affect competitive conditions overall, and even insert imbalances into the economy in some structural manner. Yet stimulating cultural activity might be much more neutral and still generate an economic stimulus.

For example, Germany around 1920 got into economic problems and the government responded by printing more money, and this caused the hyperinflation. This experience got ingrained in the German attitude towards monetary issues. In the Eurozone Germany follows the hard line that inflation should be prevented at all costs. Thus the eurozone now has fiat money that still functions as a gold standard because of the strict rules. (See my paper on this.) By comparison, when the USA around 1930 got into economic problems and the central bank was hesitant to print money (no doubt looking at the German example), this eventually caused the Great Depression. Thus monetary policy has the Scylla and Charybdis character, with the risks of either too little or too much. Potentially, the option to organise cultural activity would be a welcome addition to the instruments to avoid such risks and smooth the path towards recovery.

I am not quite suggesting that the ECB should print money to pay the unemployed in Greece, Italy, Spain and Portugal to make music and dance in the streets, yet, when the EU would invest in musea and restorations and other cultural services so that Northern Europe can better enjoy their vacations in Southern Europe, then this likely would be more acceptable than when such funds would be invested directly in factories that start to compete with the North. The current situation that Southern Europe has both unemployment and less funds to maintain the cultural heritage is obviously less optimal.

The point is also made in my book Common Sense: Boycott Holland. Just to be sure: this notion w.r.t. culture is not the main point of CSBH. It is just a notion that is worthy of mentioning.

PM. Imagine a dynamic simulation of restoring the Colosseum. Or is it culturally more valuable as a ruin than fully restored ?

I am quite neutral on the questions whether or not there is a Brexit and / or the UK breaks up. It is all up to the people in the UK what they wish to do.

My view is only that what we see isn’t democracy but political abuse. The data of the June 23 outcome are generally known, and summarised in the Appendix below. These data still leave unclear what UK voters really think. It is utterly false when politicians and their lawyers claim that the outcome represents the “views by the voters”.

This weblog entry on the Brexit referendum outcome has two aspects:

First there is an advice for young UK on safeguarding their future.

Secondly, there is the scientific outrage that voting theory has been neglected. Let me suggest to my fellow scientists to protest en masse to the political world that this Brexit referendum was & is political abuse, with deliberate neglect of scientific results on voting theory. Civilisation should not let such developments be determined by such political savagery.

Let us start by observing that the Brexit referendum question neglected the possible break-up of the UK. This isn’t hindsight but people warned for this early on, e.g. William Hague in December 23 2015 just when the referendum question was published. One might argue that people thus were warned, and if they still voted for Leave then they must have included the risk of a break-up. Thus we would live in the best-possible-world (Candide), and it is up to Scotland and Northern Ireland to decide now. However, science has shown that one cannot really interprete referenda in such manner. For example, foreign secretary of Sweden Margot Wallstrom warned on June 12 that the UK Leave might mean the end of the EU. Perhaps she intended to stimulate the turnout of Remain, but, if she was heard at all, she likely encouraged the turnout of Leave who wanted to destroy the EU too, and helped them forget about the break-up of the UK. Thus, it is too rosy to hold that people in the ballot box are fully informed and can deal well with misleading referendum questions.

For young UK (age < 50 years)

An advice for young UK who face Brexit is to study the basic theory of elections and then organise a new decision, done properly.

a paper that compares district representation (DR) as in the UK with proportional representation (PR) as in Holland. A), with a summary that appeared in Mathematics Teaching 222 in the context of the 2011 UK referendum on “Alternative Vote”.

a warning (in Dutch) to be careful with the mathematics of voting schemes.

Let us consider, for the sake of argumentation, a potential new referendum that might combine the options of Remain / Leave with UK / EU, so that voters can express better whether or not they want to leave the EU at the possible cost of a break-up of the UK. The votes on remaining or leaving the UK must be aggregated for the four areas separately, with perhaps the creation of England as a political entity too.

Would this scheme work ? The scheme doesn’t quite deal with conditionals, like (England’s ?) “Leave the EU provided that others don’t leave the UK” or (Scotland’s ?) “Remain in the UK provided that the UK remains in the EU”. (1) Opinion polls “help” people to get an idea what others will vote, but such polls can be quite misleading. (2) A scheme is to let voters rank their preferences. For example, a youngster might rank A > C > B > D and an elderly person might rank B > D > A > C, but this ranking doesn’t quite resolve conditionals, e.g. that might cause strategic voting. And what about other issues, like on immigration ?

This hypothetical case fits the general scientific finding that referenda are predominantly no good way for collective decision making. It is remarkable that this isn’t general knowledge or even part of common sense.

Best seems that people vote for parties and that parties have negotiations in Parliament. However, this also depends upon whether Parliament has been chosen by DR or PR.

The political tensions in the UK rose likely because the UK has DR instead of PR. The political system in the UK excludes minorities and reduces political competition, whence non-represented minorities grow ever more extreme.

The Dutch system with PR includes minorities and enhances competition for votes. PR forces parties to compromise, and bearing responsibility reduces extremes.

Referenda are normally PR and used to correct errors of DR, but that doesn’t make referenda true corrections.

Therefor, the best solution would be to have a decision by Parliament selected in PR manner, or, paradoxically, given that this Brexit referendum has been allowed, have a nullifying referendum. One would put four issues on ballot:

“The Brexit referendum question was too simple, and the outcome is annulled.”

“Adopt for Parliament a system of Proportional Representation (PR) like in Holland, with a Prime Minister and cabinet appointed by Parliament.”

“Adopt a constitutional Economic Supreme Court (ESC).” The ESC provides necessary checks on the quality of information for policy making. For this, see DRGTPE, and this memo in the RES Newsletter.

“If there is an ESC, then also have annual elections.” When the ESC is in place, then one can have annual elections to enhance voting power on preferences, with less risk of political chaos.

The political abuse

The New York Times reminded us on June 21 2016 that David Cameron used the referendum to resolve a political fight in his own party.

“In 2013, besieged by the increasingly assertive anti-European Union wing of his own Conservative Party, Mr. Cameron made a promise intended to keep a short-term peace among the Tories before the 2015 general election: If re-elected, he would hold an in-or-out referendum on continued British membership in the bloc. But what seemed then like a relatively low-risk ploy to deal with a short-term political problem has metastasized into an issue that could badly damage Britain’s economy, influence the country’s direction for generations — and determine Mr. Cameron’s political fate.”

This use is not necessarily an abuse, since, for example, 52% of the vote legitimise the idea, and these were not party members only. Instead, the abuse is the neglect of voting theory: the misrepresentation of a multidimensional issue by a binary choice. It is like asking “Do you still beat your wife ?” and allowing only a Yes or No, so that when the answer is No then the subsequent conclusion is: “Ah, so you admit that you did beat her before !”

Surprisingly, both David Cameron and Nigel Farage got away with the misrepresentation in the question in this plebiscite. (1) There was not enough discussion on this irresponsible simplification of the issues. At least the possibility of the break-up should have been included, see the early warning by William Hague. (2) Whatever the question up for vote, a referendum can be hijacked for another populist cause, as happened in this case with immigration. Angry voters send a vote-of-no-confidence to the government whatever the consequences.

For scientists

The case for scientific outrage is obvious. It is remarkable that we haven’t heard much from UK scientists on this. Stephen Hawking warned about Brexit but didn’t say that the referendum question is silly and dangerous.

There is this open letter of June 14 by a long list of scientists who protest:

“A referendum result is democratically legitimate only if voters can make an informed decision. Yet the level of misinformation in the current campaign is so great that democratic legitimacy is called into question.”

Curiously, however, this letter doesn’t make the point that the referendum neglects voting theory, since the very question is misleading w.r.t. the complexity of the issue under decision. Would these scientists be willing to admit this ex post ?

There is a critical article in the New Scientist of June 1 for example, but the issue of misrepresentation isn’t quite mentioned. The reporters adopt the frame that the question is sound and the voters are irrational, while the truth is rather that the referendum question is a misrepresentation and that voters are upset (albeit unconsciously) by being boxed into a corner, and by being given responsibility but no means of control (the recipe for stress).

“THE EU referendum could be the most irrational yet. Uncertainty over consequences, and contradictory economic and political information, mean that voters will be swung even more than usual by feelings and biases that have nothing to do with the issues at stake.” (Michael Bond, Jacob Aron, Hal Hodson)

It is well-accepted by students of voting theory that referenda can by abused by politicians for their own agenda. Thus the scientific outrage should be felt by many more scientists.

Insert: The Queen: “Why did nobody notice it?”- in 2008 at the financial crisis

After the financial crisis in 2008, the UK Queen is reported to have asked: “Why did nobody notice it?” (Telegraph 2008, Guardian 2012). There is the plain answer that some people warned but were not listened to, and this is the ancient issue of Cassandra or perhaps The Boy Who Cried “Wolf”. See e.g. this discussion. The same question can be asked now w.r.t. the referendum: why did not more people warn that the referendum and / or its question wasn’t sound.

Potentially, organising a new referendum would better show how the people in the UK think about a break-up. There is one catch: it may be impossible to restore the status quo ex ante. Now that Scotland has discovered that it might be dragged along by England into undesirable waters, perhaps Scotland still wishes a new referendum on independence, even when the June 23 referendum is annulled and when a new referendum confirms that the UK would remain in the EU. This is something that someone in the Policy Simulation Room should have seen coming.

Many observers already mentioned that if there would be general elections before a government dares to invoke article 50, then these elections would turn into a repeat referendum too. In that case DR doesn’t quite square with the PR of a referendum, and thus one would rather first have PR and perhaps secondly also split parties in Remain and Leave subparties.

Insert: How the UK Electoral Commission advised on the question

A kind reader informed me that the UK Electoral Commission advised on the referendum question. Looking into this is another mer à boire.

The Commission has the task to check that even a misleading question is “intelligible”.

There is a useful discussion about the difference between “remain” and “be”, and whether yes / no creates a bias for people who hate to say no. My impression is that the Electoral Commission deserves a compliment w.r.t. the clarity about the question, so that everyone can see that it was a misleading question.

However, the Commission entirely overlooks the possibility of including a “None Of The Above” (NOTA), while this inclusion might have tickled people into wondering about the misleading question itself.

There is no mention that the UK might break up after a Leave outcome. Is it really so that no-one in the UK was aware of this and that the Electoral Commission could neglect this ?

“3.25 Whilst overall awareness of the UK’s membership of the EU was found to be relatively high, many reported that more contextual information would be required regarding the voting outcomes. Particular queries included what a vote to remain a member would mean in terms of membership status: continuation of current terms of membership or something different? A small number of participants thought that a majority vote to stay would result in the UK becoming a member of the Eurozone. 3.26 There were similar queries about what a vote to leave would mean in terms of membership status: completely leaving the EU or some other form of membership? 3.27 Those who were undecided about how to vote were particularly likely to report a lack of contextual information enabling them to make an informed vote. They reported a lack of clarity regarding what each voting outcome would mean in practice. This is considered in more detail later in this chapter.”

I didn’t find the required details in this chapter. My advice to the Electoral Commission is to refuse to participate in the creation of misleading questions. It is okay to clarify questions, but one should also be aware of voting theory that referenda can be silly and dangerous. At the minimum discuss the inclusion of NOTA. The reason of the referendum is to recover the views of the electorate, and what happens with the view is not only “context” but key information for developing these views.

Insert: Partial agreement with Martin Wolf in the FT

“Might it be possible to abort the entire process? Legally, yes. As Brexiters rightly say, the UK is a parliamentary, not a plebiscitary, democracy. The step that must be taken, if the UK is to leave the EU, is for it to issue a declaration under Article 50 of the Lisbon treaty, to trigger the process. In law, a referendum is solely advisory. Only parliament can do this, because only it makes valid law.”

It is a subtle point that many will not have been aware of. The Dutch advisory referendum on the Ukraine had always been communicated as “advisory referendum”, and in the future such clarity would be advisable.

Now, both David Cameron and Jean-Claude Juncker assume that the UK will automatically invoke article 50, and the debate is only about delay (supposedly to the advantage of the UK) or speed (for the EU wishing to have it over with). There are rising tensions. Juncker’s attitude would have been different when Cameron had treated the referendum outcome only as an advice. Today, David Cameron is not present at the informal meeting of the HOSGs, and EU Council website has a statement by the 28 – 1 = 27:

“In their joint statement following the meeting, the 27 leaders announced: “We, the Heads of State or Government of 27 Member States, as well as the Presidents of the European Council and the European Commission, deeply regret the outcome of the referendum in the UK but we respect the will expressed by a majority of the British people. Until the UK leaves the EU, EU law continues to apply to and within the UK, both when it comes to rights and obligations.””

Nigel Farage was jeered and booed at with Juncker’s unkind question “Why are you here ?” when he presented himself in the EU Parliament. It is unkind not to allow Farage his moment of victory and for exporting his message to a wider EU area, and to imply that he was only there for the attendance fee. One should respect that it remains a political view whether one wants more integration or a return to a trade area. With this unkind and non-sportive treatment, one may better understand how Europe got into wars so often in the past. But also Farage did not treat the referendum outcome as an advice only.

Still, I agree with Wolf that the UK still has the option to backtrack. The real question is what would be the convincing argument. The argument must be made convincingly, otherwise tensions in the EU will rise, and businesses will reduce the risk of trading with the UK. For me, the convincing reason lies in the observation that the referendum question is an abuse and neglect of voting theory. For me, it doesn’t matter whether the UK leaves or breaks up, if only the voters have been offered the true options.

Wolf is more worried about the economy, and subsequently considers some options, including re-negotiating on immigration, and starting with:

“After selection of a new leader by the Conservative party, and perhaps even a general election, Prime Minister Johnson might, to paraphrase Emperor Hirohito’s remarks at the end of the second world war, declare that, given the “unexpected” economic damage and the risk of a break up of the UK, the situation “had developed not necessarily to the UK’s advantage”. He might forget the whole thing or, alternatively, call another referendum, merely to make sure the people remained as determined.”

The argument on the Brexit is rather thin, given that the Brexit had been presented as an issue of sovereignty and the monster of the superstate. It belongs to the possibilities that Johnson doesn’t really care much whether the UK is in or out of the EU, and that the Brexit campaign was only a last resort to get Cameron and Osborne out of the way. It is also possible that Johnson might become Prime Minister now and is appalled by the chaos that he has created, and thus becomes willing to change his position. However, it is less likely that the EU will agree with re-negotiating on immigration to try prevent the UK from invoking article 50. Politics might be blackmail but the UK cannot claim a special position w.r.t. the problems in Syria or Africa.

Thus I regard this line of reasoning as not so convincing. Little stops us from combining the principles on voting with the practice of economics. However, why would we complicate a clear issue of scientific clarity on principles of voting with a messy assessment on economics ? For the experts, as Wolf indicates, the economic assessment is not messy, but we lack an Economic Supreme Court, and thus non-economists are lost in the game of guessing who the experts really are, and experience shows that this process actually is quite messy.

David Cameron might have selected his time window till October for mere party politics, but it would provide time indeed to let these arguments percolate. I would not wait for Boris Johnson but rather look to young UK and the world of science.

Insert: Gideon Rachman’s non-belief in a Brexit

“In 1992 the Danes voted to reject the Maastricht treaty. The Irish voted to reject both the Nice treaty in 2001 and the Lisbon treaty in 2008. And what happened in each case? The EU rolled ever onwards. The Danes and the Irish were granted some concessions by their EU partners. They staged a second referendum. And the second time around they voted to accept the treaty.”

“Boris Johnson (…) hinted at his real thinking back in February, when he said: “There is only one way to get the change we need — and that is to vote to go; because all EU history shows that they only really listen to a population when it says No.”

“And what kind of new concession should be offered? That is easy. What Mr Johnson would need to win a second referendum is an emergency brake on free movement of people, allowing the UK to limit the number of EU nationals moving to Britain if it has surged beyond a certain level.”

With the EU refugee crisis (an emergency for Syria and a structural problem for Africa), it is not likely that the UK will get such exception, for the other 27 members will not be able to explain this to their constituencies. There doesn’t have to be a concession from the EU. It suffices for the UK to come to terms with voting theory, apologise to the EU for the confusion, and redo the decision making process to find out what it really wants.

A cocktail of uncertainties and possible sources for confusion

The Brexit referendum has the advantage of illuminating various uncertainties and possible sources for confusion.

My correspondent in The Hague argues that the Brexit outcome injects new energy into society, namely the idea of “getting a life”, and being freed from the suffocating bias by the collective hive. I am reminded of 1914, when people were energised to go to war. Sebastian Haffner‘s book of 1964 still needs an English translation: Die sieben Todsünden des deutschen Reiches im Ersten Weltkrieg.

One might argue that Scotland voted to remain in the UK in 2014, and thus now has to suffer the cost. The EU might welcome Scotland but might still have greater fear for break-ups like with Catalunya. Overall, my impression is that the nation states of Vienna 1815 still have an important role to play in the immediate future. Eventually a perspective of a “Europe of the Regions” (Heineken map) makes more sense. One could make a plan for the next 25 years for gradual change with both integration and distribution.

The 2011 UK referendum on “Alternative Vote” was crooked because the proposed system was too complex, likely by wrong advice from mathematicians. There is the curious Dutch D66, liberal democrats who neglect science and prefer DR.

The demographic breakdown shows that younger people turned out less and were more likely to vote for Remain, while the elderly turned out more and for Leave. Issues are: (1) When people don’t turn out, we don’t know their vote. (2) Are non-voters really indifferent to the outcome or merely confused ? (3) Don’t young people know that elections are important for their future ? (4) Was it relevant that younger people are used to a digital world while the referendum is old technology that the elderly are used to ? (5) When they have regrets, should they sit on the blisters ? (6) Will they be able to understand that this referendum was an outrage and neglect of science, and would they be able to explain this to others ?

An interesting point is that this Brexit outcome challenges the “one man one vote” principle. In Public Health we oppose “lives saved” to “life years saved”. It matters whether one saves a baby or a 95-year old. See my essay on the Value of Life. In economics we have intergenerational accounting. Potentially one might argue that young people are more affected by a decision like a Brexit than the elderly. The elderly might argue that they know better what is good for their grandchildren. A 95-year old might also argue that the world has a lot of babies but few 95-year olds, and that he or she represents a huge investment in human capital.

Remarkably, the City of London had a great interest in remaining in the EU, but was caught in the problem that others might (obviously) think that they put their interests before those of the UK. Somehow Finance lost from the Tabloids. A mediating role might have been played by Education, but Education apparently didn’t explain about the political abuse.

Dutch EU Presidency disaster, with Dutch PM Mark Rutte

Indeed, even Dutch PR has its problems. The Dutch general elections 2012 might have allowed a coalition under the leadership of Diederik Samsom, with parties PvdA & SP & CDA & D66 & CU & GL & PvdD = 38 + 15 + 13 + 12 + 5 + 4 + 2 = 89 seats in a house with 150 seats, but Samsom preferred a quick deal with Rutte (VVD, 41 seats). Samsom forgot that VVD and PvdA had made rather conflicting campaign promises, so that a coalition was strange, and both are much lower in the polls now (VVD 24, down from 41, PvdA 8, down from 38). In 2017 there are Dutch elections. VVD and PvdA had been hoping that the Dutch economy would be doing well by then, but the Brexit makes this less likely again. However, my advice is that all (decent) parties are represented in the executive of the government too, since being in government helps realism. The selection of the Prime Minister can be done by the Borda Fixed Point method.

Potentially the EU regarded the UK referendum as an internal affair of the sovereign UK. European heads of state or government (HOSG) have been advising the UK voters, but always at some “respectful distance”, and not in town hall meetings as Barack Obama toured the USA. It is part of European folklore to have a European project but while maintaining the outward rituals of sovereignty. This emphasizes the distance rather than the togetherness like in the European Song Festival. The Dutch Presidency should have been more alert on this. People in the UK might argue that there are ample people from other EU nations in the UK, so that there are ample opportunities for discussion, and that the purpose of the referendum is to let the British make up their minds themselves. But why not have town hall meetings with EU HOSGs at various locations in Nigel Farage’s backyard ?

Another comment (lost the reference) was that it was Margaret Thatcher who pushed for the neoliberal agenda, as opposed to the Continent, with the Christian or Social Democratic agendas. This caused the austerity programs and the financial crisis of 2007+ and the call for more austerity. Thus the UK exported the policies to Brussels, about which the Brexiteers complain that those came from Brussels. To this, we might add that Tony Blair proceeded along Thatcher’s path, and assisted in the false pretentions for the invasion into Iraq that eventually caused ISIL and the Syrian refugees to Europe. How blind can you be about your own crookedness ? Also, Mark Rutte has hero worship for Thatcher, and thus was the last person to explain this boomerang to the UK. See what Rutte neglects: my paper on the Cause and Cure of the Crisis.

(PM. Perhaps, however, Rutte has other objectives. Now that the House of Hanover leaves the EU, perhaps the House of Orange has better cards to get adopted as the Imperial House for the EU empire, later to be united with Russia. My correspondent in Moscow informs me that president Putin is already looking at pictures of young Dutch princess Amalia. As Putin intends to rule for a thousand years, the age difference doesn’t bother him. But the Moscow correspondent also states: “Then he swears violently, for he realises that he must also find a diplomatic solution for the MH17 problem.”)

A problem in science

There is a related issue that must be mentioned usefully. For the above, science has a positive role. However, we should not paint a picture that is too rosy. Science can also contribute to political confusion. A problem in science is that here is a common and fundamental misunderstanding w.r.t. the Impossibility Theorem of 1951 by Kenneth Arrow, a mathematician who got the Nobel Prize in 1972 for this theorem and other work. The impossibility theorem might seem complex but is rather simple, for: assume some properties and give a counterexample. The impossibility arises by a simple mechanism, namely by assuming that collective decisions can be built up from voting on pairs of issues. Obviously the world is more complex and one cannot neglect the context. However, mathematicians are very fond of the misconceptions that Arrow created, and political scientists are very fond of acting like they understand the mathematics. Thus there is a serious problem of malpractice in science itself. Cases of this malpractice in Holland are here 1, here 2, here 3. A problematic situation exists in the USA w.r.t. Donald Saari, last year the chairman of the Conference Board of the Mathematical Sciences (CBMS), the union of all mathematical associations. See also the relation of CBMS to the US Common Core in mathematics education.

In 1990, one of my papers at the Dutch Central Planning Bureau (CPB) showed that Arrow confused voting and deciding. The mathematics of his theorem is okay but his interpretation is wrong. One can use pairwise voting results but one should not regard these as decisions. The final decision can only be made when all pairwise results are in and related to each other. A cycle in voting scores translates into collective indifference. When there is a tie, then there must be tie-breaking rules. Thus, democracy is not impossible, but a bit more complex than Arrow suggested. Unfortunately, this paper of mine of 1990 got hit by censorship of science, as also my other papers, including the new approach to resolving unemployment and stagflation. The paper on Arrow’s impossibility theorem has been transformed (partially) into the book Voting Theory for Democracy, but the results on unemployment and stagflation are still importantly much under censorship that should be lifted.

Conclusion

Young UK and scientists all over the world are advised to protest against the political abuse of this Brexit referendum, and it would also help when they start boycotting Holland till the censorship of science by the directorate of the Dutch CPB is resolved.

Appendix. The Brexit referendum outcome

The following data can be found at YouGov (exit poll on ca. 5000 people) and there is a nice graphic at wikipedia (a portal and no source). John Burn-Murdoch at the FT presents a graph that turnout rises with age, from a low 65% for age 30 to a high 80% at age 50 (not copied here).

There is a trade-off between the success rates of students and those of schools. A school can enhance its image by evicting less performing students, so that only good students contribute to the success rate. Less performing students are directed to schools with lower requirements. Nicely said: there can be schools with different levels that better fit their target populations. Is the latter too good to be true ?

“De Maatschappij” (“The society”) is an independent network for people active in business and public service. On June 14 they organised a discussion about education (in-) equality. This obviously relates to success rates.

Arnold Jonk of “Onderwijsinspectie” (Inspectorate of Education) presented results of the annual survey “De staat van het onderwijs” (a series of reports since 1817). He observed that inequality increases, notably by the statistical phenomenon that children of parents with lower education have increasingly less enjoyment of higher education themselves. Jonk argued that the data showed no single cause. He also observed that inequality between schools is rising.

The discussion caused me to think that the success rate for schools should be corrected for the opportunities that are granted to weaker students. Giving an opportunity should not be punished, in the event when the student still fails.

Other people have already thought about this, see this recent discussion about including CITO scores, e.g. on the website of schools comparing each other. Yet, I find it helpful to organise my thoughts on this, so that I know better what to look for in the future. The discussion at KHMW was open, and then I don’t mind mentioning an idea that isn’t fully developed yet, even though other people may not understand what you are getting at, or think that you are reinventing the wheel. Science is open. The following exposition should be helpful, and is still preliminary.

Item Response Theory clarifies that tests say something about students, but also conversely that students say something about the test. Something must be said about the school too. At the Dutch Inspectorate of Education there are measures on the output of schools, e.g. the “Opbrengstenkaart” formerly known as “kwaliteitskaart” for secondary education. Google showed this book “Het oog der natie, scholen op rapport” (2001). An informative discussion in Dutch is by Janssens & Visscher (undated). The PISA methodology aggregates results for countries, and a similar method might be used for schools. In Belgium, Frank Roels (emeritus) has a popular and partly entertaining discussion (in Dutch) about success rates and ways to manipulate those. Yet, I haven’t looked at these methods in detail.

For this weblog entry I only want to get some preliminary clarity about the problem, by using a simple example, so that it should be clear what the problem is.

Must John retake the junior year or will he be admitted to the senior year ?

Consider a highschool with grades 9-12: freshmen, sophomores, juniors and seniors. Each class consists of approximately 25 normal students. The school accepts that 1 student normally fails at graduation. This failure rate of 4% translates into a success rate of 96%.

Consider John at the end of the junior year (grade 11). He wants to enter the senior year (grade 12) and graduate next year. John is a weak student and differs a bit from the 25 normal students that are admitted without problem (including the one who failed last year). The school wonders about what to do with John. If John would be admitted but fails graduation next year, then this will affect the school success rate unfavourably, for this means a failure of (1 + 1) / (25 + 1) = 2 / 26 ≈ 7.69% or a success of 24 / 26 ≈ 92.31%. Perhaps it is better for John to retake the junior year, and be better prepared for the senior year ? The school has a policy that students may only retake one year. If John would fail twice in the junior year, he is removed from the school. Then it is favourable for the school that he no longer shows up in the school graduation success rate. For John it might be better to go to the senior year directly, for then he has the option to try for graduation twice.

In sum: for John it is better that he is admitted to the senior year (path A), for the school it is better to let him retake the junior year (path B). Assuming some transition probabilities, the following table summarizes the cumulated rates of success for John versus the school for the two paths. The Appendix below shows how this table was constructed.

When a school district has a rule that schools should have a two year average success rate of at least 95%, then the school will be inclined to steer towards path B. In this case the school is small and fluctuations can be explained, but still.

Path

John’s success rate

School weighted average success rate

A. Admit

85%

94.9%

B. Retake

48%

95.4%

Considerations

W.r.t. rising inequality, it is unclear to me whether above perverse selection effect occurs. Having different levels of education already mitigates the effect. Schools with low education levels might already have high success rates, because they collect the dropouts of the higher levels. Still the overall effect might be a reduction of the level.

Schools with high levels may also have high success because of the selection, and not be in need for additional money. The better schools might have the market power to select the better students. Higher educated parents may provide for extra stimulus. For lower educated parents this stimulus would have to be provided by the schools, but those may not have the resources. In that case, the government might give more money to the lower level schools. In the middle, the schools with more aspiration who give students more opportunity are punished because their success rates drop, and they are less likely to get government money.

This discussion tends to interprete the school success rate as applying to the school, but it is a student average. Our real focus is on the overall success rate for all students. This includes the probability that the weaker student John also graduates. Thus the school success rate should better be corrected for giving John this opportunity.

In Item Response Theory (IRT), only students with their competences and the tests with their challenges occur, and there is no school indeed. The individual transition probabilities however are affected by the quality of the teachers, whence IRT must be corrected for the school effect. Indeed, it is a general notion that the quality of teachers is one of the main instruments, as argued by Cornet et al. (2006) at CPB. Jochems (2007) however argued that we know relatively little about education of teachers.

A quick fix

Above weighted average punishes John for requiring one more year to graduate. A quick fix is to eliminate John from the calculation when he fails in the first senior year, conditional on that we know that he will succeed the second time. When the school success rate is based upon the remaining normal students, then this suffices for the school image. In the table below we replace the low success rate of .9231 (in red) by the normal .96, as if John didn’t participate. As a result, the weighted average rises from 94.9 to 95.5. The school is rewarded by a higher success score than along path B.

Now, however, the average duration at school enters the discussion. This quick fix is neutral for the delay that already occurs for John. It however assumes that schools and students do not manipulate by turning a failing normal student into a weak student. Allowing students an additional year is a luxury for the school. Potentially though students want to graduate as fast as possible. This quick fix introduces for policy makers a delay in the outcome (with first an estimate only). I have only looked at this numerical example and not looked at the conditions on the parameters. This is just an example case, and we would have to look how it works out, say in IRT. A label for this kind of research might be “opportunity neutral or rewarding success rates”, but perhaps a known or better label already exists. Perhaps this small model then is helpful for discussion.

Why is this important ?

Better control of the transition probabilities and good measures of success are important for the management of the educational system in general. There is also this important question of design: we have differentiation in Secondary Education, so why not in Primary Education ? This gives more application for success rates. Would it not be better to replace the rather uniform system of Primary Education by a differentiated system that is more sensitive to the capabilities of the pupils ? This proposal comes from Henk Boonstra, and I tend to agree, see here, though be warned that I am not qualified for PE.

When you are sick, you go to a hospital, get monitored, and when cured return to society. For prevention, there should be constant monitoring and regular checks. For schools, we would look not only at the dropouts and low achievers but also at students functioning below their capacity in general. If John in the model above fails, he should get another diploma fitting to his results, and the true question is whether he has reached his capacity (or good basis for a career of choice). We are going to a society that keeps a digital image of your body and mind. The science of testing is with us since phrenology started, but now we need ever better systems to check upon both science and how it is applied.

Appendix on model and numerical example

There are two main paths A and B with each three endpoints, see the diagram. Let us use the following numerical example of John’s individual chances.

the probability that John graduates next year: α = 50%

the probability that John graduates after retaking the senior year: β = 70%

the probability that John becomes a senior after retaking the junior year: γ = 80%

the probability that John graduates after retaking the junior year: δ = 60%

President Obama can do little other than teach, in the last year of his presidency and with a majority opposition. Obama just advised the British to vote for the EU on the Brexit referendum. He is at risk of infringing upon national sovereignty, the very thing that the referendum is about.

Should the United Kingdom remain a member of the European Union or leave the European Union?
– Remain a member of the European Union [ ] (44%)
– Leave the European Union [ ] (42%)

Leaving the EU still allows various alternatives. If the vote would split over those options, perhaps one better stays. There is no way of knowing. Referenda tend to be silly and dangerous.

Referenda work only well when there are two options only, with a clear-cut Yes / No answer. This kind of question occurs only by exception.

Normal issues have more options and grades of grey. With at least three options, there arises the Condorcet paradox. For such issues, there better be representative government, with a Parliament selected by proportional representation (PR), and which Parliaments uses more complex methods for bargaining and voting – see Voting Theory for Democracy.

The pitfall is that a question might seem to have a clear-cut Yes / No answer while it actually has other options and such grades. Check how the Brexit question masks the other options. It often is an issue of political manipulation to reduce a complex issue to seeming simplicity, and to create a situation such that the political leader who drafts the question might argue to have the backing of the people.

Referenda belong to populism and not to democracy.

In this case, UK prime minister David Cameron has to overcome a rebellion in his own party and the threat of defection to UKIP. Check this report on Cameron’s bargaining with the EU. Given this bargaining result Cameron now argues for the EU and he hopes to secure peace in his party. It is somewhat curious that the whole of the UK is called to the ballot box to resolve such internal strife, but the same happened in 1975 with Harold Wilson and the Labour Party.

An advantage of the Brexit referendum is that the BBC now had two broadcasts “Europe: Them or Us“, that review the relation of the UK to the EU. It has been awfully nice to see the ghosts of the pasts perform their part in this drama. See also here and youtube. Some key points that struck me were:

Churchill argued for a united Europe.

The UK 1975 referendum caused people to complain a decade later: “We voted for a Common Market and later we got something else.”

Margaret Thatcher started out as a European, supported Europe in 1975, actually initiated and signed the 1986 Single European Act, with the change from a Common Market (with veto power by country) to the (Europe 1992) Single Market (replacing veto power by qualified majority), and whisked it through the UK Parliament without proper discussion about this abolition of national sovereignty. Only later came the 1988 Bruges speech.

The key point for Cameron has been to restore a shadow of that veto power. Britain cannot block others from having an ever closer union, but it has an opt-out:

“Assessment: Mr Cameron has secured a commitment to exempt Britain from “ever closer union” to be written into the treaties. He has also negotiated the inclusion of a “red-card” mechanism, a new power. If 55% of national parliaments agree, they could effectively block or veto a commission proposal. The question is how likely is this “red card” system to be used. A much weaker “yellow card” was only used twice. The red-card mechanism depends crucially on building alliances. The sceptics say it does not come close to winning the UK back control of its own affairs – and Mr Cameron is set to announce further measures which he claims will put the sovereignty of the Westminster Parliament “beyond doubt”.” (BBC Feb 20 2016)

Some points that I missed in these two “Europe: Them or Us” broadcasts:

There is no recognition for Bernard Connolly whose The Rotten Heart of Europe helped the British to stay out of the euro and to keep the pound. There is still room for a better approach to the notion of an optimal currency area.

There is little clarity about what the economic discussion really has been about. “Economic union” and “political union” are vague words, and it seems relatively easy to make a political speech or TV broadcast with these. Details matter however. Details help to keep out the ideologues. It is said that Britain has the best economists (Marshall, Keynes, Hicks) but Germany the best economy. Margaret Thatcher would have been much more effective when she had proposed good economics rather than banging the handbag. The relation of the UK to the EU would have been far better had the UK shown better economic analysis and an economy to prove it. Thatcher came to power during a time of stagflation when economists were in disarray and neoliberalism seemed the only way out. This neoliberalism however contributed to the global financial crisis and the economic crisis of 2007+. See my analysis since 1990. Of the core issue, a recent turn is the myth about German decentralised labour market bargaining. Britain has an impact on the European economy via the City and its banks (a fair reason to stay in), but why doesn’t Britain have more impact ?

Democracy in the UK suffers from district representation (DR), and it would be better to have proportional representation (PR). There is too little awareness in the UK that much of their political mayhem is caused by their rather unresponsive electoral system. See the comparison of Holland and the UK, and see how Nick Clegg shot his own foot (and destroyed the LibDems).

PM. After writing this, I discovered this review of “Europe: Them or Us” by Sean O’Grady and he says much of the same thing.

The recent Dutch referendum on the Association treaty with the Ukraine is another example of how referenda can be silly and dangerous. I voted against that treaty because of the military section hat would involve the EU in helping secure the Ukrainian borders, which would effectively move NATO’s borders eastward. Government propaganda did not pay much attention to the military section and emphasized the section on free trade. Even there the propaganda didn’t draw the parallel with the economic collapse in East Germany (DDR) when it was merged with West Germany (BRD). In this case, representative democracy failed, for it created this Association treaty, and the Dutch referendum was a freak event that might actually do some good. It still confirms that referenda tend to be silly and dangerous, since the proper answer would have been a better informed discussion in Parliament, notably by having (a) an Economic Supreme Court, (b) annual elections.

Her main message was that people might find some comfort in the idea that waves die out. March 22 saw the bombs in Brussels.

This theory of four waves of terrorism appears to be rather silly. Below gives my common sense rejection.

De Graaf is not the only academic who regards the theory of the four waves as serious. The West is vulnerable to terrorism when its “experts on terrorism” are academics lost in theory. It is okay to sooth people not to worry too much, but intellectuals should present effective approaches rather than fairy tales.

The so-called “four waves”

Jeffrey Kaplan summarizes (and then proceeds in adding his own fifth wave) (while Dutch readers can check Edwin Ruis’s review of March 13):

“Rapoport’s theory, first published on the web before finally finding a home in a printed anthology, posited four distinct waves of modern terrorism (anarchist, nationalist, 1960s leftist, and the current religious wave). Each wave had a precipitating event, lasted about 40 years before receding, and, with some overlap, faded as another wave rose to take center stage. Most terrorist groups would gradually disappear, a few (the Irish Republican Army for example) proved more durable. Rapoport’s theory was elegant, simple, inclusive, and had a high degree of explanatory power. In short, it provides a good academic model.” (Kaplan 2008).

“David Rapoport’s “The Four Waves of Modern Terrorism” is one of the most important pieces ever written in the vast literature on terrorism (Rapoport 2004). What Rapoport did in his classic study was take the complex phenomenon of terrorism and put it in a historical context that not only explained different periods of international terrorism, but also set forth theories and concepts that can be used to attempt to anticipate the future of terrorism. That is no easy task. There haven’t been many assessments and articles written about Rapoprt’s “Four Waves” theory, although this volume of papers initiates a discourse about his important thesis (See Thompson and Rasler, this volume). Despite the numbers of scholars, policymakers, and others who have joined the field of terrorism studies after the 9/11 attacks, there does not appear to be a great deal of interest in the history of terrorism. In today’s instant access and information-overload society, we are inundated with analyses of current affairs but pay scant attention to what we may learn from what has transpired in the past.” (J.D. Simon on the Lone Wolf, likely 2010)

I googled to find some criticism, but didn’t see much, though perhaps I didn’t google well. I noticed a critical text by Ericka Durgahee. I didn’t have time to look into this, and the following are my own common sense short remarks.

The anarchists 1880-1920

The dynasties of Hohenzollern, Romanov and Habsburg collapsed. Perhaps the anarchists didn’t really win because we don’t have anarchy now, but those anarchists were replaced by communists and fascists, and we ended up with two world wars, which isn’t quite “die out”.

Anti-colonialism 1920-1960

The anti-colonialists won. Winning isn’t quite “die out”.

Leftists 1960-1989

Leftism became impopular because of the Great Stagflation (unfavourable unemployment and inflation) and the collapse of the Berlin Wall. Young radicals were more motivated by Ronald Reagan and Margaret Thatcher.

In Germany, the police managed to isolate the Rote Armee Fraktion (RAF). In another article, Beatrice de Graaf explains how the Dutch radicals (Rode Jeugd, Krakersbeweging) lost their motivation by incompetence of the Dutch police. The Dutch police intended to adopt the tough German approach, but mismanaged this, and both radicals and the general population got the impression of an atmosphere of tolerance and dialogue. In that atmosphere, potential supporters saw no need for radicalisation, and radicals had the example of the dead-end street in Germany.

These events rather concern the transformation of European society after World War 2. There are pockets of terrorism, but there doesn’t seem much difference between RAF and other groups like IRA and ETA: except that each group requires specific attention for its idiosyncracies.

Religious terrorism 1979-now

Religious violence is of all times. There is no reason to predict that it will pass. This is no wave.

Alternative approach

Terrorists tend to be higher educated who are frustrated w.r.t. opportunities in society. They may feel sympathy with the unprivileged. They may adopt any ideology to recruit others in the resistance against the establishment. To counter this, one must look at society as a whole, create fair opportunity, and encourage people to participate. My own work contains aspects that are key to reduce terrorism.